Broadway Communications reported the following figures in its annual financial statements: (Click the icon to view the figures.) Compute the rate of inventory turnover and days' sales in inventory for Broadway Communications. (Round to two decimal places.) .. Select the labels and enter the amounts to compute the inventory turnover. (Enter the amount for average inventory to one decimal place, X.X. Round your answe two decimal places, X.XX.) Inventory turnover times Data Table Cost of Goods Sold 18,400 Beginning Merchandise Inventory 560 Ending Merchandise Inventory 450 Help Me Solve This Clear All Check Answer Print Done

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Broadway Communications reported the following figures in its annual financial statements:

**Compute the Rate of Inventory Turnover and Days' Sales in Inventory:**

To begin, select the labels and enter the amounts to compute the inventory turnover. Use the following formula and round your answer to two decimal places:

\[ \text{Inventory Turnover} = \left( \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \right) \]

**Data Table:**

- **Cost of Goods Sold**: $18,400
- **Beginning Merchandise Inventory**: $560
- **Ending Merchandise Inventory**: $450

**Steps to Calculate:**

1. **Calculate the Average Inventory:**

   \[
   \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}
   \]

2. **Compute Inventory Turnover:**

   \[
   \text{Inventory Turnover} = \frac{18,400}{\text{Average Inventory}}
   \]

**Graphical Elements:**

The image contains an interactive digital form, where users can input figures to calculate inventory turnover. This form aids learners in understanding financial metrics by allowing them to engage with real-world data.
Transcribed Image Text:Broadway Communications reported the following figures in its annual financial statements: **Compute the Rate of Inventory Turnover and Days' Sales in Inventory:** To begin, select the labels and enter the amounts to compute the inventory turnover. Use the following formula and round your answer to two decimal places: \[ \text{Inventory Turnover} = \left( \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \right) \] **Data Table:** - **Cost of Goods Sold**: $18,400 - **Beginning Merchandise Inventory**: $560 - **Ending Merchandise Inventory**: $450 **Steps to Calculate:** 1. **Calculate the Average Inventory:** \[ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} \] 2. **Compute Inventory Turnover:** \[ \text{Inventory Turnover} = \frac{18,400}{\text{Average Inventory}} \] **Graphical Elements:** The image contains an interactive digital form, where users can input figures to calculate inventory turnover. This form aids learners in understanding financial metrics by allowing them to engage with real-world data.
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